Sustainability when Resource management has Stochastic Consequences

Sustainability is usually defmed as a requirement to each generation to manage the resource base such that the average quality of life that it ensures itself can be shared by all future generations. When the consequences of each generation's management of the resource base are not deterministic, this definition can, however, not be used. The purpose of this note is to present a characterization of the usual definition of sustainability that can be extended to, and hence provides a definition in, the case with risk. The properties of this proposed definition in the case with risk are investigated. Norwegian School of Economics and Business Administration, N-5035 Bergen-Sandviken, Norway. 2 Central Bureau of Statistics, P.B. 8131 Dep., N-0033 Oslo, Norway. The idea of this paper arose through discussions with Eirik Amundsen, Erling Moxnes, and Bjorn Sandvik. In particular, we would like to thank the latter as well as Trond Olsen and seminar participants at the EEAC in Dublin, for helpful comments. Asheim has received financial support from the Norwegian Ministry of the Environment and the Norwegian Research Council for Applied Social Sciences through the Norwegian Research Centre in Organization and Management